Bank / Credit Union
Big banks pass stress test, raise dividends
June 28, 2022
Morgan Stanley, Goldman Sachs, Bank of America and Wells Fargo all have cleared their annual stress tests.
As a result, the four banks increased dividends to investors, according to a report at Yahoo Finance.
The stress tests were established after the 2007-2009 recession when the Fed began examining how banks would fare against a hypothetical economic downturn. Due to the results, the banks boosted their dividends by the following:
- Goldman Sachs increased dividend by 25% to $2.50 per share.
- Morgan Stanley increased to 77.5 cents per share and introduced a share buyback program of $20 billion.
- Bank of America raised dividend by 5% to 22 cents per share.
- Wells Fargo up dividend to 30 cents per share.
Not every bank raised its dividends however. JPMorgan kept its dividends at $1 for "higher future capital requirements." Citi also kept it at a flat 51 cents.
Citigroup, JPMorgan and Bank of America also all raised their stress capital buffer, an additional cushion of capital on top of the regulatory minimum.
